Sprint/T-Mobile merger axed

The long reported Sprint/T-Mobile merger seems to be dead in the water as Reuters is reporting today that Sprint has decided to axe the deal and will not pursue it further. The deal between the third largest carrier in the US (Sprint) and the fourth (T-Mobile) has long been mooted, but Sprint has pulled the plug on buying the "Uncarrier" company because the deal is unlikely to get support.

The question for both companies is where do they go from here?

Sprint has long courted T-Mobile, even before its recent success. The company wanted to pay $32 billion to buy T-Mobile and such has been Sprint's poor record of late, there were even suggestions that the company would fold itself under the T-Mobile banner. However, Sprint is almost certain that any talk of a merger would be shut down quickly by regulatory bodies who fear a monopoly in the US market, much the same way they shut down the proposed AT&T/T-Mobile merger.

Sprint will now be forced to go it alone as it attempts to solve its ailing reputation and poor record in recent times. The company has made several mistakes in recent years, such as choosing WiMAX instead of LTE as its 4G technology of choice. Sprint has also been bleeding subscribers and it was thought aligning with T-Mobile would bring some much needed market cool to the brand.

As for T-Mobile, its fortunes are much brighter as the "Uncarrier" movement has served in shaking up the mobile industry in the US. The company is gaining millions of new subscribers, stealing customers from rivals, and turning a profit. However, despite the brands rude health, parent company Deutsche Telekom still wants to offload the company. Of course, buying T-Mobile right now could be a lucrative move as the company is doing well, however suitors are hard to find.

Regulatory bodies will shut down any US based move for the company, at least from another carrier. In Europe, French carrier Iliad has expressed interest enough to table an offer of $15 billion for T-Mobile, but that falls someway short of the company's current valuation of $27 billion and is significantly lower than what Sprint was willing to pay.
source: Reuters

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